Social Security is a part of every retirement plan for almost every worker in almost every part of the world.
The whole essence of social security is that it provides replacement income for every retiree and their families that fit in the criteria.
If you are among most of the workers around the country that are covered under social security numbers, you should know how the whole system works and the amount that you are eligible to receive from social security after you retire.
There are a lot of questions surrounding social security and how you can qualify for retirement benefits. And we are here to answer those for you.
How do you retire with social security?
This is an important question since we want the most benefits after retirement.
For you to retire with social security, there are a bunch of programs available. However, you can adopt the following measures from your end to ensure receiving social security after retirement:
- Don’t take social security unless you absolutely have to.
- Keep your healthcare costs under check.
- Cut down the expenses of your home.
- Streamline your expenses.
- Talk to an expert about your legal queries.
- Eliminate debt as it eats away your savings.
- Pay taxes on time.
- Enroll yourself in benefit programs.
How much can your retirement benefit be?
Often, your retirement benefits are counted based on how much you have earned during the career you worked. Usually, if you have earned more during your lifetime, your retirement benefits would also be more.
In case there were a few years that you had few earnings than you generally have, the benefit amount could be lower than if you worked steadily.
The entire age where you decide to retire would also affect your benefits. If you take early retirement, you might also receive fewer benefits.
How do you qualify for retirement benefits?
You are required to pay the social security taxes for your work and for that, you earn credits that are counted in your social security benefits. The total number of credits that you require for getting the retirement benefits depends on the time you were born.
Suppose you were born somewhere around 1930 or later, you are going to need 40 credits which is about 10 years of work.
However, if you stop working before only, you are going to have enough credits for qualifying for the benefits and the credits are going to remain on your social security record.
And, if you decide to return to work in due course of time, you can also add more credits to qualify. For you to receive benefits for retirement, you need to complete a certain threshold of credits.
Usually, social security retirement benefits could be received as early as the age of 62. But, the benefits received are often changed and could be reduced with early retirement.
Suppose, you turn somewhere around your retirement age (depending upon the country) by the year 2020, your benefit would be about 30% lower as compared to the required age for retirement.
People would also stop working before their retirement age. However, if they do, all the years without any earnings would probably mean a lower SS benefit as they are retiring.
There could be multiple reasons for people to retire early and if you quit because of any health problems, you can easily consider applying for the social security disability benefits which are almost the same as the full amount. When you get the social security disability benefits after reaching the normal retirement age, those benefits would be converted to retirement benefits.
You can also choose to keep working beyond your full retirement age since that’s also a possibility.
And in case you do that, you are likely to increase your future social security benefits in a few possible ways.
Every extra year, your work adds another year of earnings to your SS record where more earnings mean higher retirement benefits.
Your benefit is also going to increase a certain percentage from the very time you reach your full retirement age until you start receiving benefits.
This percentage very much varies depending upon the year of your birth. Suppose you were born around 1945 or later, there could be a specific percentage addition to your benefit for every full year that you delay while receiving the SS benefits beyond your full retirement age.
At this point, I’m sure you have a question:
Can I have a comfortable retirement on social security alone?
Well, it’s true that even though your first priority should be to save for retirement, your money usually ends up at different places that eat away your savings.
Social security is a great thing, but it’s not something that you can wholly depend upon. If you still have time to retire, try to look for ways that could primarily build your savings.
Try pooling in your money towards a suitable retirement plan at first, especially if it has a great matching contribution.
If you don’t have any such plan in your work, try looking for other plans that could help you maximize your savings. The more you save now, the more you have later on.
Suitably, if you want to stretch your benefits or cut the overheads, you can also take social security late as it makes a big difference. You can even travel abroad or settle there if they have great retirement benefits in order to maximize your savings.